The user has to define the following inputs to the model:
1. Present value of cash flows from continuing project
2. Annualized standard deviation in ln(present value of CF)
3. The remaining life of the project
4. The value received on abandonment
5. The number of years that you have rights to abandon project
6. The riskless rate that corresponds to the option lifetime

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)